Social Security More Secure Than You Might Believe

Fear. When it comes to money, anyone looking for a way to manipulate or motivate only has to push a person’s fear button. We’ve all got that button and it gets pushed a lot whether we’re consciously aware of it or not.

Take Social Security for instance. Want to scare the bejesus out of someone —- multimillionaire or food stamp recipient—-just tell him or her that his or her Social Security checks won’t be forthcoming. Or, as the author of a recent Morningstar story wrote, the program is going bankrupt, is a Ponzi scheme and that it pays generous benefits.

Trouble with all of that let’s-scare-folks-to-death talk is, those points aren’t true.

Mark Miller wrote the Top 10 Myths About Social Security in a Morningstar piece published earlier this month. He makes some good points in it. Below are a few of them:

-The biggie: Social Security is going bankrupt. This little goodie got its start thanks to W. and his push for privatizing S.S. In President George W. Bush’s 2005 State of the Union address, he campaigned to replace Social Security with private investment accounts. “The system . . . on its current path, is headed toward bankruptcy,” he said. “And so we must join together to strengthen and save Social Security.”

I can’t think of anything worse that individuals being fully in charge of their own monies in a private investment account. It’s a cuckoo idea. Plus, would erase the purpose of the program’s original intent that was to provide some financial security for widows, orphans, the disabled and old-aged people.

Don’t believe anyone who tells you that the system is going bankrupt because it isn’t. According to the piece, last year “Social Security took in $69 billion more than it spent….when you include tax receipts and interest on bonds held in the Social Security Trust Fund… and the SSTF had reserves of $2.7 trillion last year.”

The trust fund does have financial challenges to face come the year 2033, but it is not today, nor will be then, bankrupt.

-Two more biggies: Social Security is a Ponzi scheme—that’s a big fat lie. And, that the benefits paid are generous.

First, the Ponzi part.

From the story:” The Merriam-Webster Dictionary defines a Ponzi scheme as: “An investment swindle in which some early investors are paid off with money put up by later ones in order to encourage more and bigger risks.”

Since its first check of $22.54 went out to Ida May Fuller on January 31, 1940, Social Security hasn’t missed a payment check to anyone.

As for those generous benefits, the average retirement benefit is now around $14,800 a year. Likely less if you’re a woman.

Depending upon which side of the bridge you live on, that 1200 bucks a month might cover a solid portion of your monthly bills. Or, not even come close to getting your guy a pair of Stefano Bemer’s or you an alligator Hermes bag.